What is it? “Succession planning focuses on identifying and growing talent to fill leadership and business-critical positions in the future,” says the Chartered Institute of Personnel and Development (CIPD). “There’s no one model for succession planning as its focus is likely to be quite different in small and large organisations, although it can be equally vital in both.”
Be proactive The clue’s in the name – planning. Don’t wait until one of your key players walks out of the door before considering who’ll replace them. Kerynne Metherell, a consultant at executive search firm Russell Reynolds, says: “It’s never too early to start succession planning – it should be an ongoing process. This ensures the organisation is prepared for any eventuality and maximises chances for internal candidates.”
Look at the bigger picture To manage succession, take account of the broader picture, not just individual roles, says Sue Filmer, a principal at HR firm Mercer. “It’s about understanding the flow of critical business skills – where they’re moving to, where they are coming from. And you may have a wodge of retirement coming up in the next 10 years, with lots of expertise about to walk out the door, so you have five years to bring on the next generation.”
Who’s included? Succession planning should cover the top roles and those in other pressure points of an organisation. “It can be tempting to focus on the most senior roles – CEO, COO, CFO – but you risk overlooking great talent that may be in the lower ranks,” says Graham Oates, chief executive of executive search firm Norrie Johnston. “To be as effective as possible, a succession plan should have a long-term perspective, identifying who could fill gaps now, in a year or even in five years’ time.”
Consider the pool approach “It’s possible for succession planning schemes to take a more generic approach, targeting a ‘pool’ of positions for which similar skills are required,” says the CIPD. “Jobs might be clustered by role, function and/or level, so that the generic skills for particular roles can be developed. The aim is to develop pools of talented people, each adaptable and capable of filling a number of roles. Because succession planning is concerned with developing longer term successors as well as short-term replacements, each pool will be considerably larger than the range of posts it covers.”
Cast the net wide Don’t automatically assume the second-in-command is the right person to step up. “Get alignment from all key stakeholders on the leadership and experiential criteria you’re looking for” says Metherell. “Strategic CEO succession planning is about creating options. And if you’ve started the process early enough, the lens can be kept broad and include tracking external candidates, hiring potential ‘step-up’ candidates into apprentice-type roles, non-executive board members, development of internal candidates and even M&A activity to acquire in key talent.”
Broaden your candidates’ experience In the past, people have tended to gain experience by upward moves, with accompanying increases in status and salary, says the CIPD. “Today, that may not be possible because organisations are less hierarchical, with fewer management layers. A sideways move into a different job, perhaps without additional compensation, may be a way of gaining additional experience.”
Use secondments Some organisations are also taking advantage of secondment opportunities as a way of providing wider development opportunities to potential leaders. This can be effective, especially when an organisation is working with increasingly flat structures. “Organisations can benefit from both inward and outward secondments as these can be a useful way of providing development to meet individual and organisational needs and sharing knowledge across the business. However, secondment opportunities must be properly planned and supported throughout their duration in order to ensure their success,” says the CIPD.
Create a development programme Internal candidates on the succession plan should be properly developed, says Metherell. “Depending on the time frame, we suggest clear programmes that identify gaps and develop the necessary skills, experience, knowledge and competencies. If the most likely candidate is external, that person can be tracked or put into a development, stepping stone or interim role.”
Put it to the test “A holiday is a great time to have a potential successor step in to assume some responsibilities,” advises search firm Robert Half. “The employee will gain experience while you learn how prepared the person is to take on a bigger role.”
Keep it under review Some successors will move on and others will start to look less promising, so you need to constantly monitor your succession plan. Oh, and don’t forget to consider who’s going to succeed the successors.